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Alex Brill, a fellow of the American Enterprise Institute, argues convincingly that Israel will end up as a foreign direct investment backwater, despite its current success in that realm, if it continues to pander to the tax-’em-high camp. He demolishes the idea that higher taxes will help Israel’s budget, arguing that taxing investments is counterproductive and risks leading to even deeper debt. getAbstract commends this paper for its insightful analysis.

In this summary, you will learn

How a lower corporate tax rate benefits nations like Israel,

How and why Israel’s investment-friendly tax regime is under pressure, and

What consequences the country may face if it continues to increase the business tax rate.

About the Author

Alex Brill has served as policy director and chief economist for the US House of Representatives Committee on Ways and Means.

Summary

Capital and investment have never been more mobile, and competition for foreign direct investment (FDI) has never been tougher. Israel – a modest-sized, open, export-oriented nation – picked a bad time to undermine its pivotal corporate tax regime with a 1% hike. For smaller, more open economies, a ...